It is very easy to make money mistakes AND to keep making them, which is why you need to figure them out and stop doing them early on so you can break the bad money habits.
If you have already made financial mistakes you can fix them even if it takes a while, it’s well worth the work and time. We all have to start somewhere!
“If your financial life is not in order, every other area of your life will be in disorder.”
― Bamigboye Olurotimi
The quote above rings true, whenever my finances haven’t been the best, all other areas of my life also suffered (mostly due to the stress).
related:
7 HABITS OF PEOPLE WHO HAVE MASTERED SAVING MONEY
11 THINGS I QUIT BUYING TO SAVE MONEY AS A SAHM
30 HELPFUL TIPS FOR LIVING WITH LITTLE MONEY
HOW TO MAKE A BUDGET IF YOU HATE BUDGETING
Common Money Mistakes People Make
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1) No Budget
Not having a budget is a huge money mistake that surprisingly a lot of people make.
You need to have a budget in order to know where your money is going and how much you having coming in vs going out.
Taking control of your finances is a good strategy to start at any point in your life, you should always have a budget in place and stick to it.
There are a ton of resources for those who suck at budgeting and need some help, so there is no excuse as to why you can’t start a budget today.
2) Fell Behind On Bills
This is a huge reason many cannot get out of debt or start a savings. Once you fall behind on payments it can be near impossible to catch up due to late fees.
What you need to do is address your finances and find out why you fell behind in the first place.
Correct the issue, and make a plan to pay off your late payments as well as paying your recurring monthly payment (or the cycle will never break).
You may need to find ways to make extra money in order to catch up on your payments or cut back some of your expenses, either way you have options!
3) No Emergency Fund
Having an emergency fund is very important and those who don’t have one risk falling into debt, which is a major money mistake!
Emergency funds are more important than savings because without one you would take from your savings if an emergency expense was to come up.
4) No Financial Goals
You need to have some financial goals set so you know where you are going and want to be in the future.
This includes planning for retirement or even just a vacation, you need to have some sort of goals to motivate you to keep budgeting and sticking with it.
5) Over Spending
I think we have all been guilty of this, as it is very easy to do without even realizing it.
Again this is why budgeting is so important, you need to know what you are spending your money on so you can correct any money mistakes you may have made the month before.
The main area I know a ton of people over spend on is their food bill, you can easily correct this as there are many ways to save money on groceries.
6) Using Credit Cards For Quick Fixes
So many people (including myself) have used their credit cards for quick financial fixes, whether you fell behind on a bill, owed money, or had an emergency expense.
This is a huge money mistake since you are still in debt AND you will be in more debt then before because of interest rates. This is why having an emergency fund is so important.
7) Subscriptions
Adding this to the list since these days almost everything is a monthly subscription, especially if you have kids! With the internet is so easy to sign up for free trials (which is great) but you need to remember to keep track of them or they can wreck havoc on your bank account.
8) Ignoring Fees
Fees can occur with many things and we probably don’t even realize. With banks you have your normal monthly bank fee which might not be a huge amount but when you pair it with other fees such as overdraft, ATM fees, or going over your monthly transactions this can add up to a lot of $$. You need to be aware of what your bank charges you for, recently my bank made a change where if you made an e-transfer from a savings it would now cost you a $1. Doesn’t seem like much but that month I made 20 e-transfers, which cost me an extra $20! After going over my bank rules I realized all I had to do was use my checking account instead.
Moral of the story is to check over your bank account rules!
9) Overspending On Fun
It is very easy to over spend when you are out having fun, many times I have been guilty of this. You have to come to terms with your financial situation and determine what kind of fun you can afford to do. There are plenty of fun things to do that don’t cost money.
10) Always Buy New
Keeping up with the Jones’s never ends well when it comes to your bank account. Buying new is a great feeling, however if you can’t afford it then that wonderful rush you feel will turn to panic very quickly. Buying second hand can be just as great, I get a rush when I come across a great deal and actually need the item! Which brings us to our final money mistake.
11) Buying Because It’s On Sale
Of course I just said to buy second hand or when items are discounted, but that doesn’t mean you should buy things only because they are on sale. You need to know what you actually need vs what you just want because it is cheap. One thing that helped me achieve this was to adopt a minimalist lifestyle, which has been proven to reduce stress!
There you have 11 common money mistakes, share below if you have any you think should be added to this list!
